Purpose Within The Modern Corporation

The concept of purpose in business has been around for over a decade and increasingly companies flourish by pursuing something nobler then monies alone. A recent report from the Saïd Business School at the University of Oxford, Enacting Purpose Within The Modern Corporation, claims that the current COVID-19 crisis offers a window for more businesses to rebuild on stronger purpose-based foundations.

Purpose describes why an organisation exists, the scholars claim. “It sets out the issues that an organisation seeks to solve … This sets purpose apart from three other important organising principles for organisations – values, mission and vision.”

They suggest that the C-suite should not only define and promote traditional concepts such a vision, mission and values but the concept of purpose must be added.

PURPOSE ARTICULATES WHY AN ORGANISATION EXISTS.

It sets out the issues that an organisation seeks to solve. The purpose of business is to solve the problems of people and planet profitably, and not profit from causing social, ecological and economic problems. 

VALUES ARTICULATE HOW THE ORGANISATION BEHAVES.

Values capture the way an organisation intends to operate, underpinning corporate culture. They usually take the form of a series of bullet points which are short and simple, indicating expected behaviours and norms.

MISSION SETS OUT WHAT THE ORGANISATION DOES.

It captures the day to day activities of the organisation. It is directly linked to the strategy of the organisation and is underpinned by the values deployed to deliver the mission. It is very practical and descriptive in nature.

VISION DESCRIBES WHERE THE ORGANISATION INTENDS TO HAVE IMPACT.

It describes the outcome that the organisation wants to see from the successful delivery of its stated purpose. Put simply, vision captures what success looks like. By its nature, vision statements are aspirational, large scale and usually long-term.

They argue that boards of directors should specifically discuss and debate all four of these organising principles. They are ultimately accountable for ensuring that the purpose of intent is translated into purpose practice. In doing so they are required to exercise their judgement in delivering the long-term interests of the organisation, in regular communication and dialogue with investors.

Download the full report from Saïd Business School at the University of Oxford

Apart from defining purpose, organisations need to identify structured ways to enact on their stated purpose. To that end, they propose a framework summarised with the acronym SCORE.

Simplify

Purpose needs to be short and simple enough to be understood by all co-workers, the whole supply chain and all other stakeholders, incl customers and the general public. 

Connect

Purpose should be the reference point for strategic decisions. It has to steer into what everyone in the organisation does; and externally, it should connect with external partners throughout its supply chain and customer markets.

Own

Ownership of purpose starts with the board but it has to be embraced by everyone in the organisation. Purpose also has to be accepted and supported by the organisation’s shareholders if it is to have any credibility.

Reward

A group-wide performance measurement system should align the organisation’s incentives and rewards with the promotion of purposeful behaviour.

Exemplify

Bring organisational purpose to life through communication and narrative strategies. Done well, these can build a sense of shared identity around a common purpose that inspires those working in the organisation to believe that they are contributing as a team to something that is meaningful and fulfilling.

Adding Purpose as an additional concept to mission, vision and values and the SCORE approach can help CEO's and their leadership teams to transform organisations and prepare them for the 21st-century demands.